Alliance and Bowater Announce Alliance Shareholders Approve Acquisition.

Business Editors

MONTREAL & GREENVILLE, S.C.--(BUSINESS WIRE)--June 26, 2001

Alliance Forest Products (TSE: ALP, NYSE: PFA) and Bowater Incorporated (NYSE: BOW) today announced that the shareholders of Alliance have approved the previously announced Plan of Arrangement with Bowater at the annual and special meeting of Alliance held in Montreal June 26, 2001. The holders of 99.97% of Alliance's outstanding shares represented at the shareholders meeting voted in favor of the transaction.

The hearing for the final court order approving the Plan of Arrangement will be held on June 27, 2001, before the Superior Court of Quebec, to approve the Certificate of Arrangement under the Canada Business Corporations Act.

The transaction is subject to certain regulatory reviews and approvals.

Alliance Forest Products Inc., headquartered in Montreal, Quebec, is an integrated company specializing in timber harvesting and forest management, as well as in the production and sale of newsprint, uncoated groundwood papers, pulp, lumber and related products. The company has operations in Canada and in the United States. The common shares of Alliance Forest Products Inc. are listed on The Toronto Stock Exchange under the symbol ALP and the New York Stock Exchange under the symbol PFA.

Bowater Incorporated, headquartered in Greenville, SC, is a global leader in newsprint. In addition, the company makes coated and uncoated groundwood papers, bleached kraft pulp and lumber products. With Bowater's pending acquisition of Alliance Forest Products Inc., the company will have 12 pulp and paper mills in the United States, Canada and South Korea and 13 North American sawmills that produce softwood and hardwood lumber. Bowater also operates a facility that converts a newsprint base sheet to coated products. Bowater's operations when combined with Alliance will be supported by approximately 1.8 million acres of timberlands owned or leased in the United States and Canada and 32 million acres of timber cutting rights in Canada. Bowater is one of the world's largest consumers of recycled newspapers and magazines. Bowater common stock is listed on the New York Stock Exchange, U.S. regional exchanges and the London Stock Exchange. A special class of stock exchangeable into Bowater common stock is listed on the Toronto Stock Exchange (TSE: BWX).

Statements in this news release that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements about our business outlook, assessment of market conditions, strategies, future plans, future sales, prices for our major products, inventory levels, capital spending and tax rates. These forward-looking statements are not guarantees of future performance. They are based on management's expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. The risks and uncertainties relating to the forward-looking statements in this news release include those described under the caption "Cautionary Statement Regarding Forward-Looking Information" in Bowater's annual report on Form 10-K for the year ended December 31, 2000, and from time to time, in Bowater's other filings with the Securities and Exchange Commission.